
The program will be effective for two years through March 2024
Alibaba's Hong Kong-listed stock jumped more than 11% after the Chinese e-commerce behemoth announced an increase of the size of the share buyback program to $25 billion from $15 billion. The repurchase scheme will be effective through March 2024.
The Hangzhou-headquartered company has faced multiple issues, including macroeconomic headwinds and regulatory tightening from the Chinese government. Alibaba received a $2.8 billion antitrust fine last year. In the past 14 months, the country's government introduced new rules across the tech industry, often without warning. The new rules shook investor confidence and wiped billions of dollars of value off the publicly listed giants.
The move is considered a way to boost investor confidence, as Alibaba's shares had started depreciating since October 2020, when they reached an all-time high. "Alibaba's stock price does not fairly reflect the company's value given our robust financial health and expansion plans," stated Alibaba's Deputy CFO, Toby Xu.
After the news hit the wires, in US premarket trading, Alibaba's share price rose 9%, and the Hong Kong-listed ones surged 12%.
Sources: barrons.com, cnbc.com
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